This number shows that inflation is in a benign mode for the U.S. economy.

The higher level of energy prices is certainly affecting the psychology of consumers. But the underlying strength of the economy, and the continued increase in the relative strength of the underlying job market should prevent consumer spending from collapsing.

The economy was firing on almost all cylinders. It is continuing to show the resilience we've seen time and time again.

The economy remains very solid and it appears likely to expand at a pace of 4-1/2 percent to 5 percent in the second half of the year.